East African Business Week (Kampala)
Zostine Kiongozi
12 April 2009
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Kampala — The price of property across the East African region is rising steadily even during these recessionary times.
The population is increasing day by day, and the demand for housing facilities has also grown.
In some sections of the upper class and urban community, there are already indicators of much money chasing few properties. However, this doesn't mean that players in the real estate industry can buy whatever they find in the market without taking heed to the principles of real estate investing.
In the previous series, I have stressed that if you buy the property right, you can make a lot of money even if the value on rent remains constant and I have also said that your ability to be a successful property investor depends on how well you can negotiate on every piece of land, materials or the building you want to purchase, among other factors.
Beyond the shortage of housing units, more than half the population in East Africa lives on less than one dollar a day and, as a result, decent housing facilities appear to be far above the purchasing power of many urban dwellers across the region.
A recent housing survey revealed that Uganda has a shortfall of about 500,000 housing units. Kampala city alone already has a housing deficit of 100,000.
A source at the Ministry of Housing and Urban Planning said this is due to inadequate housing facilities nationwide, despite the much publicized property boom. Given the ongoing global financial crisis and the high cost of living that hit every corner of the globe, it is now very hard for people to enjoy decent housing facilities.
Many urban dwellers squeeze in small units (commonly referred to by Ugandans as 'mizigo') with relatives or friends because they cannot afford decent accommodation of their own.
Uganda's population growth rate estimated at 3.2% annually is among the highest in the world. Urban population is growing more than its housing sector probably due to high birth rates and rapid migration of people from rural areas, among other factors.
According to Uganda Bureau of Statistics, about 4.8 million people in Kampala will have no housing to live in by 2025.
In an effort to shoulder this burden; National Housing and Construction Corporation has constructed about 2,000 units so far. However, this is not likely to decongest the city if people's incomes are not improved too.
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